The Internet has witnessed rapid growth and expansion especially from the early 1990s onwards. It has become accepted as a medium of general usage worldwide, as a result of which more and more people are turning to it for an array of reasons. As a market place, it is already providing opportunity for millions of peoples to trade in goods and services. But unlike other conventional market places, the Internet has no “legal tender”. This is understandable given the fact that it transcends all natural and man-made political and geographical delineations. Presently, the means of payments in use include credit cards, bank checks and, money orders. Of these three, credit cards are the most popular because of their real time, on time value in facilitating e-commerce transactions.
But of significant concern is the fact that the use of credit cards is only popular in North America and, parts of Europe. Simply put, a vast proportion of Internet users world-wide does not have access to credit cards, as their economies are cash based. This limitation is severely affecting the volume and value of online transactions. According to a publication by Jupiter Communications, 33% of the U.S. population and, 90% of world population do not have credit cards but want to shop online. From this same study, it was found that 93% of online consumers above the age 45 did not complete their Internet transactions because of misuse and privacy concerns (AARP). Another research by the Peppers and Rogers Group has found that 98.9% of direct sales revenue earned on the web between 1999 and 2001 were on B2B basis. The future of Internet retail sales as forecasted for the next 8 years by this report is distressing. It is clear that the absence of a convenient, rational and globally acceptable payment mechanism will continue to stifle retail and individual transactions on the web.
From the emerging patterns, it can be assumed that B2B transactions and relationships have been on long before the advent of the Internet. Therefore, businesses have established trust and developed secured channels for making payments such as Letters of Credit, Transfers, Direct Debit, etc. which has now been carried over to the Internet. Retail users do not have this benefit. Another point of note is that corporations offering credit card services have minimum amounts of business below which, they will not touch. This further discourages retail purchases below $10 on the web.
Also, service providers are limited to incomes they generate from sign-up, monthly/annual subscriptions and, charges on some services from within specific geographic locations only whereas they stand a chance to get paid worldwide for offering the same services. The frustration of the glaring lack of access to credit cards by patrons and the attendant geographic gulf has forced Internet Service Providers (ISPs) merchants to offer so many services for ‘free’. Consequently, most of the free offerings on the Internet have become subject to much abuse by some merchants and users. As the Internet has grown in popularity, so also has grown massive dread for it as a result of severe abuses like unwanted and frequent intrusion into peoples privacy, stealing of users confidential information, etc. The activities of spamming, hacking, e-bombing, spoofing and defacing of web pages by cyber terrorists constitute one huge albatross that Internet users are having to deal with albeit unsuccessfully. Studies have shown that cyber crimes are committed by young, impressionable IT students/personnel who derive pleasure in creating programs that run counter to the various applications driving the world wide web. And, they are able to commit these atrocities simply because after paying a fixed monthly/annual access charge the web is virtually free for anyone with access either to host a website, upload, download, receive or, send any ‘stuff’. Attempts at evolving net ethics do not seem capable of addressing these problems.
ISPs have found themselves in this helpless situation because of the absence. of a payment method that enables them charge for services such as subscriptions, sending emails, conducting searches, joining news/chat groups, etc. As stated above this is because of the supranational nature of the Internet, the resultant scattered location of users across several international boundaries and the near impossibility of an acceptable Internet legal tender.